FTB-C000491 / Evidence concept

Bollinger Confidence-Interval Misinterpretation

Bollinger Confidence-Interval Misinterpretation is the incorrect claim that two-standard-deviation bands automatically form a 95-percent price confidence interval.

Also known asBollinger 95 percent fallacy

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Definitions

In plain terms

Rolling security prices are not made normally distributed, independent, or inferentially valid by drawing standard-deviation bands.

Technical

The creator's guidance warns against statistical assumptions because the price distribution is non-normal and typical windows are small.

Scope

Any probabilistic coverage or forecast claim requires a separately specified model and empirical validation.

Examples

  • A reviewer traces Bollinger Confidence-Interval Misinterpretation from aligned inputs through its first-ready row and edge cases before accepting a displayed value.

Common misconceptions

  • Any probabilistic coverage or forecast claim requires a separately specified model and empirical validation.

Concept relationships

Prerequisites

Related

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D07-F04-A03 Important

Evidence and governance

  1. Bollinger Bands Rules John Bollinger · first party methodology

    Supports: preferred label, short definition, technical definition

    Limits: Interpretive rules do not prove forecasting power, trade profitability, or one universal parameter selection.

  2. Measures of Scale NIST/SEMATECH · official standard

    Supports: preferred label, short definition, technical definition

    Limits: The statistical reference does not define Bollinger Bands or validate financial forecasts from price dispersion.

Reviewed by
fintech-builder-batch-009
Last reviewed
2026-07-30
Next review
2027-07-30
Record status
published
Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.